Distribution firm John Menzies Plc has reported a 60 per cent dip in first-half profits, largely on restructuring costs and contract losses.

Pre-tax profits for the six months to June were £5.8 million, down from £14.2 million in the same period a year ago.

Edinburgh-based Menzies has booked £11.2 million in exceptional items for the first half, including £4.7 million of asset impairments after losing a licence renewal to operate ground handling services at airports in Spain.

Stripping out one-off costs, pre-tax profits for the first half dipped to £17 million against £20 million last year.

The group said profits will be heavily weighed towards the second half as a result of ongoing restructuring across group activities in first half trading.

Menzies, which stated in March it planned to 'rebase' its dividend payments to retain cash for investment, has booked an interim dividend payout of 5.0 pence per share for the first half, down from 8.1 pence last year.

Revenue for the first half rose to £1 billion, up from £992.6 million for the same period a year ago, with aviation revenue up eight per cent to £381.8 million.

However, underlying operating profit from aviation was down £3.9 million to £9.4 million.

Menzies said its distribution division “outperformed management's expectations” in the first half and “profit decline from print media was fully mitigated”, with first half underlying operating profits from the division up slightly at £12.2 million (H1 2014 £12 million).

Distribution revenue dipped to £630.6 million, down from £638.7 million for the first half of 2014.

“Trading performance benefited from impressive cost savings offsetting the impact of World Cup stickers in 2014 and the decline in newspaper and magazine revenue,” the group said.

Sales of newspapers in the period were down four per cent on a like-for-like basis and magazine sales were down five per cent.

Menzies said a strategic review of the distribution division is now complete.

The group acquired AJG Parcels Ltd in June for £7.5 million, a company which handles more than three million parcels a year, delivering to harder-to-reach parts of Scotland, which it described as an “important step” in realising the potential of its UK wide logistics network.

Jeremy Stafford, chief executive of John Menzies Plc, said: “Our transition plans are on track and progressing well although the first half of the year has been challenging as we continue to address the operational issues that arose during 2014.

“The North American aviation outsourcing market remains very busy and a pipeline of opportunities continues to build.

“At Distribution, the core business is performing well and the anticipated volume decline has been fully mitigated.

“We have completed our strategic review and I am delighted that we have recently made our first step as a neutral consolidator into the growing e-commerce parcel market with the acquisition of AJG Parcels.

“In terms of group full year performance, as we previously highlighted, profits will have a greater second half weighting this year as we continue to transition the business.

“There is a great deal of potential across the business and we remain on track.”

Shares in John Menzies Plc were down 2.3 per cent in early Tuesday trading.

**Note - This article was amended at 2:30pm August 17 to reflect the cut in interim dividend Menzies presented in the first-half results today reflects a "rebasing" to lower dividend payments first announced in 2014 results in March when the group reported a 39 per cent drop in full year profits to £25.7 million.